ABSTRACT Far from being simple sites of storage for excess energy, adipocytes play a major role in regulating organismal substrate flux, and they manifest extraordinarily complex metabolic pathways. The increasing prevalence of obesity in the United States, along with its metabolic and cardiovascular sequelae, make it imperative to further expand our knowledge of adipocyte and adipose tissue physiology and pathophysiology. In the first cycle of this application, we have generated a number of novel and provocative observations regarding the importance of endogenous adipocyte apoE expression for the regulation of adipocyte lipid metabolism and gene expression. The current competing renewal application addresses three new hypotheses with three Specific Aims, each of which is based on observations made in the current grant cycle, and each of which depends on tools and experimental methods we have developed in the current grant cycle. Specific Aim # 1 is based on the hypothesis that changes in endogenous apoE expression in response to treatment of adipocytes with inflammatory cytokines or PPAR&#947;agonists are required for the effect of these regulators on adipocyte lipid metabolism. These experiments will use mature WT and EKO adipocytes that are isolated from freshly harvested adipose tissue, and cultured adipocytes from mice and rats in which apoE expression has been altered by viral transduction. Specific Aim # 2 addresses the hypothesis that changes in caveolin gene expression that we have observed in EKO adipocytes are due to altered sterol flux in these adipocytes. In these experiments, we will identify sterol responsive elements in the adipocyte caveolin gene, and determine if these are the same elements responsible for mediating the marked suppression of caveolin gene in EKO adipocytes. The second hypothesis of Specific Aim # 2 evaluates if reduced caveolin expression (and caveolae number) in EKO adipocytes contribute to the changes in lipid metabolism we have observed in these cells. In these experiments, we will evaluate the effect of manipulating caveolin expression (using viral transduction) on lipid metabolism in WT and EKO adipocytes. Specific Aim # 3 addresses the hypothesis that the &#945;-helical lipid binding C-terminal domain of apoE is required for the regulatory effects of endogenous apoE on adipocyte lipid metabolism that we have observed. For these experiments, we will express WT or a Cterminal truncation mutant of apoE in EKO adipocytes, and evaluate changes in adipocyte lipid metabolism and triglyceride accumulation. In observations made in the first cycle of this grant application, we have observed that endogenous apoE expression influences adipocyte triglyceride synthesis, triglyceride hydrolysis, triglyceride content, adipocyte size, fatty acid transport, and the expression of a number of significant adipocyte genes (e.g. caveolin). The experiments proposed in this competing renewal application will further address mechanisms involved, and allow us to further develop an integrated model for the role of endogenous apoE in adipocyte differentiated function.